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Applying the Fraud and Abuse Laws
in Digital Health
Session 250, February, 14th, 2019
Paul Westfall, American Medical Association
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Paul Westfall, J.D.
Has no real or apparent conflicts of interest to report.
Conflict of Interest
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Learning Objectives
Background
Use of Digital Tools
Better, Same, or Worse? Solutions?
Examples
Hype cycle technologies
PAY ATTENTION: I MAY OR MAY NOT HAVE
CANDY ON ME.
Agenda
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Identify why fraud and abuse is so pervasive in health care,
common fraud schemes, and what tools can be used to
prevent fraud and abuse
Recognize the importance of fraud and abuse in healthcare
and its impact on health information technology
Display knowledge that the fraud and abuse laws can apply
to health information technology and that these laws carry
civil and criminal penalties
Compare and contrast program integrity issues from the
traditional health care world to the digital health care world
Learning Objectives
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Fraud = intentional deception to secure unfair or unlawful gain
Services not rendered, kickbacks/bribes, unnecessary tests, upcoding,
unbundling
Abuse/Waste = practice that’s inconsistent with standards that results in
unnecessary cost
Insufficient documentation, medical necessity, incorrect coding, no
documentation
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The state of Healthcare
Medicare Fee-for-Service: $40 billion in improper payments
(annual)
Insufficient documentation: accounts for 2/3rds of
improper payments
Physicians: $8.7 billion (annual)
Federal Law Enforcement: $5.8 billion in funding (past 7
years)
Recovered $25.8 billion in fraud (past 7 years)
Just Medicare and just Fee-for-Service
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Fraud, waste, and abuse
Why so much fraud, waste,
and abuse in health care?
Nature of the business
Lack of internal controls
Lack of education
Targets
Aging populations and
high cost patients (chronic
diseases: Alzheimers,
dementia, diabetes)
High volume and high
concentration (nursing
homes, home health)
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The Laws and Penalties
Law
Translation
False Claims Act
Don’t lie
to the
government
Civil Monetary
Penalties
Seriously, don’t lie (and
more)
Stark/Anti
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Kickback
Don’t get stuff
in return
for referring patients
Exclusions
Death knell to your
career in health care
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What does every healthcare fraud scheme need in order to be
successful?
A. Disgruntled employees
B. A patient and a provider identify
C. Threats of physical violence
D. Capability to launder money
POP QUIZ
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What does every healthcare fraud scheme need in order to be
successful?
A. Disgruntled employees
B. A patient and a provider identify
C. Threats of physical violence
D. Capability to launder money
POP QUIZ
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Keys to Preventing
Fraud and Abuse
Your Conduct
Your Employees/Contractors
Your Compliance Program
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Is it stuff?
Are you using a digital health technology to
increase value and to better coordinate care for a
Medicare beneficiary?
AKS/Stark violation FCA liability
Don’t forget about your state!
Enhance current schemes?
Use of Digital Health Technologies
make you vulnerable?
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Perception of digital being worse?
Easier to commit fraud?
Less oversight from traditional oversight entities?
New players unaware
What does this perception mean?
More oversight
More prescriptive requirements up front
Less desire to reimburse from health plans
Or is it better? Same? Making excuses?
Traditional v. Digital
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Better
Increase data accuracy
Less human error
Easier to show fraud (e.g., upcoding)
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Better
Data: IP Address, geo-location, device identity
Automatically creates background transactions
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Same
Lying
Cheating
Stealing
Not invasive
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Same
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Worse
Costs less to look legit
How do we know that the
individual who is
examining Elroys throat
is a healthcare provider?
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Worse?
Easier for unlicensed individuals to provide
care
Enforceability of laws and regulations
across state lines and country borders
More accurate data means more potential
scrutiny from the government
Codes that use time as a proxy for
intensity
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Affiliation with traditional medicine
Established patients (e.g., virtual check-in)
Controls in place for checking licensure or
exclusion and duplicate payments across
payment systems
Interstate Medical Licensure Compact
Potential solutions?
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Imaginary?
Perceived increase in utilization in using digital
medicine?
Need to educate that digital health may increase
access
More mobile, easier to steal?
“Mobile devices in the health care sector remain
particularly vulnerable to theft and loss”
Roger Severino, Office of Civil Rights Director, April 24, 2017
Need to educate
Mobile may not mean digital medicine. It could be just a
laptop from a hospital.
Fallacy of physical security
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Home Health Example
No actual home health therapy is provided. The patient is asked
to sign forms that verify a nurse or staff showed up at her home
and provided services.
To justify charging for a nurse or staff, a fraudulent physician who
is not the beneficiarys primary doctor may falsely certify that the
beneficiary is an insulin-dependent diabetic and cannot inject
himself.
Unscrupulous physicians may also falsely certify that a beneficiary
is home bound. In exchange, the beneficiary will be offered cash
on a monthly basis or provided a home health aide that only
prepares meals or cleans.
Better, same, or worse?
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Better
Data accuracy
Digital medicine provides data of glucose levels without
human error or manipulation
Measure glucose levels to determine if insulin dependent
Automatic data processing
Compare claims data to see if there is any data being
exchanged between computers
Help determine whether services are actually performed
IP Address
May help determine if patient is homebound
Audience Feedback
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Same
Lying, Cheating, Stealing
As it was in the traditional, and now, and ever shall be in the
digital....
From the example
False certifications
Kickbacks
Audience Feedback
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Audience Feedback
Worse
Cost less to look legit
Easier for unlicensed individuals to provide care
Enforceability of laws and regulations across
state lines and country borders
Factors figuring into whether digital medicine is
potentially worse will probably be cross applicable
regardless of service type
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Blockchain
Immutable,
distributed ledger
Patients can control
data
Well, hello
beneficiary
inducement CMP!
Artificial Intelligence
Nefarious and
unintended
Fraud detection
Type of remuneration?
New frontier with a lot of
unknowns
How do you regulate
something that's
constantly changing?
Blockchain and AI
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Identify why fraud and abuse is so pervasive in health care,
common fraud schemes, and what tools can be used to
prevent fraud and abuse
Recognize the importance of fraud and abuse in healthcare
and its impact on health information technology
Display knowledge that the fraud and abuse laws can apply
to health information technology and that these laws carry
civil and criminal penalties
Compare and contrast program integrity issues from the
traditional health care world to the digital health care world
Revisiting the Learning Objectives
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Paul.Westfall@ama-assn.org
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